Friday, 5 November 2010 at 14:09, Reuters, Tokyo
Honda Motor Co said its Chinese venture with Dongfeng Motor Group Co would have annual production capacity of 100,000 units when it starts operations in 2012, more than the initially planned 60,000 units.
Dongfeng Honda Automobile Co, which held a ground-breaking ceremony on Friday for its second factory in the central Chinese city of Wuhan, will raise capacity to 120,000 units in 2013 and eventually double that to the designed capacity of 240,000 units, Japan's second-biggest automaker said in a statement.
Seiji Kuraishi, head of Honda's China operations, said Honda wanted to "eventually produce hybrid cars in China" in order to offer the fuel-sipping vehicles at a reasonable price.
Honda currently exports the Civic hybrid to China from Japan. The car costs 269,800 yuan ($40,420) with a 25 per cent import tax, and Honda sold just 63 units in the first nine months of 2010. It also plans to export the Insight and CR-Z models to China in 2012.
Honda's car sales in China grew 22 per cent to about 580,000 units in 2009.
Honda said its combined capacity would rise to 890,000 cars a year in 2013, including expansions at its other joint venture, with Guangzhou Automobile Group, and an export-only factory.
Honda's shares were up five per cent in midafternoon trade in Tokyo, extending earlier gains after the news. The transport sector subindex was up 3.6 per cent.
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